re: #178 FFL (GOP Delenda Est)

The effect of a Gold standard is to eliminate the ability of a Central Bank to change monetary policy. This is for _some_ countries a good idea, but a Gold standard is not the only way to solve this problem. If we are ever in a situation where a hard Gold standard is necessary, we will be seriously screwed.

Countries which have completely irresponsible Central Banks which pander to the whims and fancies of whichever politician wants to make changes in monetary policy for short term political pressures or to favor their cronies end up doing better once they lose the ability to arbitrarily print money. We’re talking about countries which have mostly abandoned the rule of law like Zimbabwe and Venezuela. Or countries in severe economic distress like Weimar Germany. And its where Trump will take us unless his wreckingball is stopped.

However, there are other ways to have a stable currency. Some countries have switched to depending on the currency that’s still as good as gold, the US dollar. But Donnie probably thinks we’re being suckers for allowing others to use our currency despite the massive economic and political benefits it gets us for having the standard currency for international trade.

Others have created transnational central banks (The EU, and two groups of Francophone African countries) which are _relatively_ insulated from one country’s political pressures. Others create what are called currency boards where a central bank can only issue its local currency on deposit of an equivalent amount of a backing foreign currency, which has been the US dollar in many of those cases.)

Legalizing Gold at its market value as an additional tender — people don’t have to take it for debts unlike Federal Reserve Notes, and using it to buy goods doesn’t automatically incur tax paperwork on use due to fluctuations in price — is what some of the more moderate gold standard supporters are advocating (like Reason types). Which is not a horrible idea, but of course there are the details. And one would need good rules on valuation, exchangeability, and preventing an employer from say paying their employees in Eagles but only paying payroll taxes on the nominal face value of them. South Africa has gold (in the form of Krugerrands and other government gold coins) as an additional legal tender at the market price of gold, and their central bank guarantees purchasing of said gold coins at market rates.

But then, there are those on the black helicopter side advocating the elimination of fractional reserve banking, deposit insurance, and favor replace the dollar with gold, realizing (or not realizing) that this would cause gold go to $100,000/ounce to cover everyone’s bank deposits, and gangs of people would be attacking anyone with a gold chain or a gold ring given how valuable they would become.